Robert Shiller's Warning

ABC News reports:

If a prophet is only as good as his last prophecy, then you'd be wise to listen to Robert Shiller. On "Nightline," Shiller offered his considerable analysis of the current real estate market … and he doesn't bring good news.

It was back in the heady stock market days of 1996 that Shiller, an economics professor at Yale University, gave voice to his first prophecy. He warned that the stock market was overheating and that investment had risen to what he described as irrational levels. The stock market crash that followed was no surprise to Shiller and proved that he had called it right.

Now he's warning that a similar collapse may soon apply to the real estate market. And there's evidence that he may be right here, too.

Shiller has done some interesting research on the long term relationship between incomes and housing prices.It makes you think what's the real value of a house.You might say that the long term real returns on housing versus the stock market are quite different.